Despite the fact that deployments of fiber to the home (FTTH) and 4G LTE infrastructure in China have peaked, the overall demand for optical devices to support FTTx and the mobile fronthaul and backhaul markets should continue to grow over the next five years, according to a new report from LightCounting.
The market research firm says in its new "Next-Generation Access Optics" report that 2016 will see more than 115 million optical devices, worth approximately $1.7 billion in revenue to components makers, sold this year for use in FTTx and wireless infrastructure. Almost 70% of that total will derive from deployments in China. Demand for similar optical components and devices in China will "moderate" between 2017 and 2021, LightCounting expects. However, access infrastructure deployments in developing countries and next-generation optics sales in the developed world will pick up the slack to enable continued market growth within the forecast period, LightCounting believes.
For example, worldwide sales of optics for mobile infrastructure and FTTx will exceed $2 billion by 2021, LightCounting projects. China's share of the market will decline to 50% but remain significant at nearly $10 billion over the next 5 years, as figure above illustrates.
Chinese equipment makers, while suffering declines in their home market, will benefit from the expected growth in the rest of the world, including developing markets, via exports of products and expertise. This will come despite increasing backlash against globalization in some Western countries, LightCounting says.
Meanwhile, deployments of 5G mobile infrastructure should begin in 2020 and boost the wireless fronthaul market. However, LightCounting believes it very likely that retimed Ethernet will replace CPRI connections. Retimed Ethernet requires less bandwidth than CPRI, and its use will limit the prospects for high-speed optics sales growth for this application during the forecast period, the market research firm says.
LightCounting's "Next-Generation Access Optics" report represents a consolidation and update of two previously separate LightCounting reports: "Next-Generation FTTx Optics," published in July 2015, and "Mobile Fronthaul Optics," published in November 2015. The report covers the outlook for future optical access networks, including architectures, service provider deployment strategies and trends, component requirements, and the products needed.
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